Question 1: (No diagram is required for this question)

a)[7 marks] Define Public Goods and Common Resources on the basis of their characteristics. Give an example of each. Describe one problem associated with each type of goods.

b)[7 marks] Why do economists prefer corrective taxes and tradeable permits over command and control policies as a way to protect the environment from pollution? Explain

c)[6 marks] What is tariff and what impact does it have on a country's well-being? List and explain two arguments in favor of trade restrictions like tariff.